Item 2.02. Results of Operations and Financial Condition.
On February 12, 2014, Lorillard, Inc. ("Lorillard" or "we") issued a press
release providing information on its results of operations for the three months
and fiscal year ended December 31, 2013 (the "Earnings Release"), which was
furnished as Exhibit 99.1 to the Original Form 8-K. The information in the
Earnings Release is amended and qualified by the information set forth herein
and Exhibit 99.1 hereto as a result of the subsequent event described below.
2013 Subsequent Event - Florida Supreme Court Ruling in Mrozek Case
In Mrozek v. Lorillard Tobacco Company (Circuit Court, Fourth Judicial Circuit,
Duval County, Florida), the jury awarded plaintiff a total of $6.0 million in
compensatory damages and $11.3 million in punitive damages in March 2011. The
jury apportioned 35% of the fault for the smoker's injuries to the smoker and
65% to Lorillard Tobacco. The final judgment entered by the trial court
reflected the jury's verdict and awarded plaintiff $3.9 million in compensatory
damages and $11.3 million in punitive damages plus 6% annual interest. In
December 2012, the Florida First District Court of Appeal affirmed the final
judgment awarding compensatory and punitive damages. In March 2013, Lorillard
Tobacco filed a notice with the Florida Supreme Court seeking review of the
appellate court decision.
On February 14, 2014, the Florida Supreme Court declined review of the
intermediate appellate court decision. Based on this information, Lorillard has
accrued $20.0 million as of December 31, 2013 for the Mrozek case, which is
recorded as a charge to selling, general and administrative expenses in 2013.
This subsequent event occurred after Lorillard's issuance of the Earnings
Release, but prior to the filing of its Annual Report on Form 10-K for the year
ended December 31, 2013.
We have revised our financial statements and other disclosures contained in the
Earnings Release to reflect the establishment of an accrual of $20.0 million for
the Mrozek case as of December 31, 2013. Lorillard's reported (GAAP) results for
consolidated selling, general and administrative expenses, operating income, net
income and diluted earnings per share and for the Cigarette segment's selling,
general and administrative expenses and operating income for the quarter and
year ended December 31, 2013 were impacted by the full accrued amount for this
subsequent event. Lorillard's adjusted (Non-GAAP) results for the quarter and
year ended December 31, 2013 contained in the Original Form 8-K remain
unchanged. The revised financial statements for the fourth quarter and fiscal
year 2013, revised reconciliation of GAAP to Non-GAAP measures and certain other
revised disclosures are set forth in Exhibit 99.1 to this Amended Form 8-K.
The information disclosed under this Item 2.02 of this Amended Form 8-K,
including Exhibit 99.1 hereto, is being furnished and shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liabilities of that section, nor shall it
be incorporated by reference into any filing under the Securities Act of 1933,
as amended, except as shall be expressly set forth by specific reference in such
Item 9.01. Financial Statements and Exhibits.
99.1 Revised Lorillard, Inc. Fourth Quarter and Full Year 2013 Results.